Companies are set to benefit from increased efficiency and reduced costs, following the launch of an audit system to unearth bottlenecks in supply chain and map out areas of automation.

The Shippers Council of Eastern Africa (SCEA), which is to undertake the audit, will review logistic processes of select companies— supply chain processes and systems— benchmarking them with other global firms.

Officials said the audit will identify key logistics cost drivers, bottlenecks and propose areas of improvement.

“Globally, 42 per cent of the cost of doing business is in logistics. Reducing that will see significant change. Whenever there’s a problem in logistics, the price goes up,” SCEA chief executive Gilbert Langat said during the launch in Nairobi yesterday.

The audit comes after a pilot on supply chains of five SCEA member firms, which began six months ago.

Cargo

The audit found the companies lacked fully integrated logistics functions and professionalism. They also used poor cargo tracing and tracking methods.

The audit blamed cargo owners for the uncoordinated logistics operations and outdated practices.

“Companies should conduct such audits on an annual basis. An audit can produce potential savings of between 10 to 20 per cent of the total logistics cost,” Mr Langat said. Non-SCEA members are charged slightly higher rates for auditing their processes compared to members.

Kenya Private Sector Alliance transport committee chairman Auni Bhaiji said a logistics audit helps expose challenges faced by clearing and forwarding agents such as fees and charges, lack of response, poor flow of information and weak insurance cover.

“The logistics audit will help us to discharge our duties even more professionally,” he said.

Mr Langat called for quick implementation of electronic logistics systems, adding that they would cut the cost of logistics, reduce corruption and boost efficiency.

Source: Business Daily

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